Where Analysts See Zoom Video Stock Going After Earnings
Zoom Video Communications Inc. (NASDAQ: ZM) released its fiscal first-quarter financial results after the markets closed on Tuesday. This stock has seen a meteoric rise since COVID-19 hit, and with shares now topping $200 after earnings, analysts are weighing in on the stock.
24/7 Wall St. has included some brief highlights from the report, as well as what analysts said after the fact.
Zoom said that it had $0.20 in earnings per share (EPS) and $328.2 million in revenue. The consensus estimates had called for $0.09 in EPS and $202.48 million in revenue. In the same period of last year, the company posted $0.03 in EPS and $111.66 million in revenue.
At the end of the latest quarter, Zoom had roughly 265,400 customers, or about 354% more than in the same quarter last year.
The firm also boasted 769 customers contributing more than $100,000 in trailing 12 months revenue, up 90% from the same quarter last year.
Looking ahead to the fiscal second quarter, the company expects to see EPS in the range of $0.44 to $0.46 and revenue between $495 million and $500 million. Consensus estimates call for $0.11 in EPS and $223.32 million in revenue for the quarter.
BofA Securities reiterated a Buy rating and raised its price objective to $240 from $165. The brokerage firm noted that COVID-19 has permanently elevated the cloud communications and video market, and this enhances the value proposition and improves its long-term revenue potential. Also, BofA Securities said that Zoom has “zoomed passed the base and hyper growth case scenarios laid out in the initiation just one year ago.”
Credit Suisse reiterated an Underperform rating and raised its price target to $160 from $105. In its report, Credit Suisse detailed:
Zoom’s F1Q results were ahead of our upside case as the pandemic is pulling forward multiple years of demand. The company’s role during the crisis has enabled the capture of significant mindshare and market share with both free and paid users, which should benefit the company over the medium and long term. While F2Q guidance implies an annual run rate slightly above our upside case, we anticipate slower growth exiting the pandemic vs. premium-multiple peers as future growth depends more on upselling Phone, a market with tougher competitors and a product that does not benefit from network effects like Video Conferencing. We raise our TP to $160 (from $105) but remain Underperform given valuation at EV/CY21 revenue of 28x.
Here’s what a few other analysts had to say following the report:
- FBN Securities upgraded it to Outperform with a $250 price target.
- Robert Baird has an Outperform rating and a $230 price target.
- Citigroup’s Neutral rating comes with a $217 price target.
- Needham has a Buy rating with a $230 target price.
- Cantor Fitzgerald rates it as Overweight with a $261 target.
- Stifel Nicolaus has a Sell rating and a $180 target price.
- Piper Sandler has a Neutral rating with a $211 price target.
Zoom Video Communications stock traded up about 5% to $218.30 on Wednesday, in a 52-week range of $60.97 to $220.90. The consensus price target is $132.07.